Depending on the type of trading you plan to do, you may need to hire a broker to handle your investments for you. Brokers work for brokerage houses and have the ability to buy and sell stock on the stock exchange. And if you are going to buy or sell stocks, you must have a broker.

Its important to understand the difference between a broker and a stock market analyst. An analyst literally analyzes the stock market, and predicts what it will or will not do, or how specific stocks will perform. A stock broker is only there to follow your instructions to either buy or sell stock… not to analyze stocks.

When you instruct your broker to buy or sell a stock, they earn a set percentage of the transaction. For the most part brokers charge a flat ‘per transaction’ fee.

There are two types of brokers: Full service brokers and discount brokers. Full service brokers usually offer more types of investments and may even provide with investment advice in some instances. Full service brokers tend to work on a commission basis.

Discount brokers often do not offer any advice and do no research – they just do as you ask them to do, discount brokers are for the “seasoned” investor.

Choosing a broker and the right broker to manage your money will probably be the biggest decision you make when it comes to investing. But you will need to decide what type of broker you will need, a full service broker or a discount broker. Then you will have the tasking of choosing the right person… that you trust with YOUR money.

Most people who are new to investing,  tend to go with a full service broker to ensure that they are making wise investments. A full service investment broker can offer the skills that one may lack at this point. However, if you are familiar with the stock market, all you should really need is a discount broker to make your trades for you.